Donna - Just commenting to say, " I hear You". Not much I can offer in way of help. It does seem to take a long time for the banks these days. i have actually had them go to foreclosure and take thousands less than the offer I had for them. Hopefully, soon it will be less hectic for all of us! Best!

Wow. It looks like you did everything you could. I've been around a few years but hadn't worked any short sales lately. It sounds like they are really getting harder.

By the way, it sounds like you did everything you could to track the files down. If they're buried and you can't get hold of anyone there's not much left to do.

Donna, Lenders tipically have there own set of rules to follow. It is not predicated on any form of logic, emotion or even common sense. It is just a set of rules that they follow. I have done several short sales over the years and belive me when I say that Lenders could care less how others do it.

Small Critique here. Your post was very hard to read. All bold and two long of paragraphs. Very it a lttle makes for much better reading.

Hi Donna,

When I read your post, a number of things came to mind. I need to read it over very carefully again so as not to jump to any incorrect conclusion.

This is such a volatile issue that I will not show a short sale property until I am assured that the listing agent had sought and received pre-approval before I would even consider dragging one of my clients through this very difficult transaction. I no longer will list a short sale property unless I can get pre-approval from the lender in advance.

Your post was excellent and well timed for the professional and the consumer.

All my very best wishes and I hope it all works out for all of you.

The lenders are many times insured against the mortgage loss.  This is part of the reason that they make decisions that to most people seem stupid.  In order to take the payoff from the insurance company, they need to incur the loss.  The insurance payout is what they are after, not your offer.  Not always, but sometimes. 

Donna, I'm experiencing the same thing, the lenders are not set up for this and don't seem to want to accommodate easier access. I'm working with one where I have to call customer service every single time and give all my customer's information before they will decide to transfer me to the department I asked for from the start.  Of course, no direct number, neither. Rich is making an excellent point!  Just hang in there!

Hi Everyone - I am new to AR and have made most of the changes suggested - thank you! I will remember them for the future.

Rich - thank you for the insight about them taking the loss from the insurance company -I never thought about that.  This is a silly question but are the only loans insured FHA & loans with PMI?

I know that short sales are only accepted about 20% of the time - and I do not mind putting the work and time into them if the seller has a true hardship.  My frustration is mostly the lack of communication from the lenders.  Short sales are nothing new - they have been around for years - although probably not as frequent over the past 5 years you would think they would be able to set up a system to make it more streamline. I tell everyone of my clients that the chance of getting once accepted is very slim - but they only do it as a last hope effort to try to keep some self respect.

As the listing agent of several short sales- I have not had one lender give me a "pre-approval" on a dollar amount of the sale. Most tell me they will not do anything until I have an offer - and to submit the whole package together.  I do have two lenders that have been very good and one ordered an appraisal within the first week of the listing.  The other lender did tell us that my client did "qualify" for a ss but I had to have it listed for 60 days first.

Way to go Donna! 

I agree with your rebuttal. One reason why I try and avoid the potential quagmire.  Might be material for a good second post on the subject.

Donna, it sounds like you have had several experiences with short sales. This is just starting to occur here in AZ you might do a good turn with sharing some thoughts/experiences that helped you to give us some idea as we begin to fight this battle.

Donna,

I'm a new agent (less than 1 year) with a very strong mortgage background.  I have a client that is very interested in picking up a property that is either a short sale or foreclosure.  I had no idea what I getting us into by sending these listings to him.  We bid on a property that had been listed as a short sale for 60 days only to find out that the agent had 2 full price offers that were waiting for response from the back.  These people had been waiting 60 days for an answer.....I was stunned.  As much as I know that lenders are not in the business of holding onto real estate, it's very hard for me to explain this to my client when he wants to believe that the lenders are holding out for higher bids and maybe then they will respond. 

I agree with Jim, that any information you can give us to will help us to determine the next steps if we find ourselves either as listing agents or selling agents on these distressed homes. 

Thank you.

I wish that I had some answers as to what the banks are thinking ... my guess is they just are so busy they are not thinking. Although if you really want me to be honest - had they been thinking in the first place we would not have the amount of foreclosures that we now have. There was a time, not that long ago, that almost anyone over 18 with a pulse could get a loan. They were not "pretty" loans - but they gave the opportunity to have the "American Dream" and own a home.

I am not trying to bash mortgage brokers - they were just selling the loans that were available on the market.  And I can totally understand someone wanting to be a homeowner, but I personally made it a point not to put my clients into those "really really creative" loans (unless they were a seasoned investor). You know the ones that I am talking about - the ones that allowed you to say you made $7,500 a month and you worked at a fast food restaurant as a cashier part time and needed no proof other then you "stated" you make that much. Now I will admit that scenario is a little exaggerated ... but not by a heck of a lot!

Again - not trying to bash anyone - but if you are at the stage in your life that you are just barely making ends meet and then try to buy a house in the $300,000 - $450,000 as a first time buyer with 100% financing - how long are you really going to be able to keep those payments up with electric bills in the $300-$500 range when you are running your a/c (for those of you reading that do not live in Palmdale or Lancaster we typically hit over 103 during the summer) not to mention gas over $3.00 a gallon and occasionally we like to eat. Oh I almost forgot we also have to pay our property taxes...ouch!

Anyway - what is done is done and we can not go back and change it, so I will get off my soap box and try to give you some tips if you have a buyer for a short sale:

If you are working a buyer and want to show a home that is "listed" as  a short sale, My first suggestion would be to talk to the agent first. See if: 1) the agent has experience with short sales 2) who is the lender 3) Is it a federally insured loan 4) Is there a first & a second 5)  Is the loan is a recourse loan or a non recourse loan 6) how many payments did they make before they defaulted 7) Are the sellers insolvent, and does the seller have a TRUE hardship. 8) and most importantly are they already behind in payments, and has the NOD been filed yet.

I have found several listings and the sellers are not yet behind in payments. These deals will take a VERY long time close. Most lenders will not discuss any kind of short sale or loan modification until you have missed at least 1 payement.  Now I am not suggesting to tell the clients to stop payment - but if the lenders are being paid why would they take less?

Now most likely the lender will not  consider it is a hardship if the seller can not make their payments just because their rate & terms went up unless there has been a death, loss of job, divorce  or some sort of major life change since the loan was taken out.  If the listing agent can and will answer those questions - and the answers were all in favor of the short sale, proceed showing your buyer. Also ask the listing agent if the complete short sale package is already complete and only waiting for an offer to be submitted to the bank (the complete package should include at least: A hardship latter, the sellers income tax returns for the last 2 years, last 3 months bank statements, last 2 months paychecks or SSI or what ever income they have or why they no longer have income, and any other supporting documents that will support the hardship: divorce papers, death certificate, work pink slip, doctors note - etc.)

If you are a California RE Agent you CAN work with investors and you CAN find them homes in default - but unless they are buying the home as their primary residence you can not represent them. Huh?? I know are probably confused and  I know that sounds odd - and I to have it explained to me a couple of times before I finally was able to "get it".

If you do not understand how to do it - ask your broker-if they do not know call the CAR Attorneys-they are very helpful, they also have some great resources on their website  http://www.car.org/ go to legal and you will find a bunch of good articles that relate to California Foreclosures. Basically to get paid on this type of transaction you will have to terminate your "Buyer Agency" with your investor and refer them to the listing agent.  The CAR forms you will need to use for this type of transaction: Termination of Buyer  Agency (TBA), Home Equity Explanation & Agency Agreement (HEAA) Notice of Default Purchase Agreement (NODPA).

My guess is that if you show a short sale,and do not call the listing agent first and submit the above forms they will have no idea why you are using them. They may even tell you that YOU are using the incorrect paperwork. One of the biggest problem I see today is that agents are taking on these sales and are not educated in what to do. If you do not know ASK someone who does know, and most importantly DO NOT GIVE LEGAL OR TAX ADVICE to your sellers unless you are an attorney or a CPA, even then I would probably tell them to talk to someone else just to protect yourself. If you take a short sale listing DISCLOSE, DISCLOSE, DISCLOSE that there are NO guarantees the lender will agree to a short sale and that they MUST seek advice on possible tax consequences.

Most importantly - when and if you decide to work short sales - do NOT guess. It could cost you or your client THOUSANDS of dollars if the wrong forms are used. Hopefully I have not scared you off because you should show the short sales - your client could get a great deal, plus you may be helping out a really nice person get out of a really bad situation.

Donna, there is soooo much misinformation about the short sale process... mostly from the pitchmen selling books "Get Rich Quick"books or seminars.  There are several thousand posts written by TheShortSalePro addressing realistic and ethical preforeclosure short sales on the TCI Short Sale Forum  I think membership is free.

Many/most folks new to this workout technique fail to appreciate the difference between "lenders" and "servicers" and "investors"  and "insurors" and what roles all interested parties play when seeking preforeclosure short sale approval.

• An Ethical Approach (to short sales)

Donna, excellent post. Haven't read your comments yet but need to get to clients. Your thoughts are the thoughts of many of us. It's time for the Banks to step up and turn around their turn around time. Many don't even want to show a short sale due to that very fact. Why put a Buyer through all that and waste time only to find out they have been rejected. Considering how many defaults and foreclosures we have right now, it is important the Banks realize that this is not the way to do business.

You are the Featured article for the Week.Congrats!

"Why put a Buyer through all that and waste time only to find out they have been rejected?"

You are absolutely correct, and have identified what may be called putting the cart before the horse.  That's why it is important to quickly establish short sale criteria for THAT specific loan type, with THAT specific loan servicer.  A deal that fails to close due to a lack of an understanding of the process and some proactive prequalification (homework) of the short sale candidate is a disservice to all those involved.

• An Ethical Approach (to short sales)

So much to read, so little time...what stood out was a comment of only 20% of short sales are approved?  Would love to know what others are experiencing.  I think the public and Realtors are under the delusion that REOs and short sales are always going to go through.  Knowing the top ten tips and the statistics, and than implementing them would be a blessing.  Just submitted an offer for REO yesterday.  Have had two short listings way back last year before the word was even out-did not go through, because in one case the bank thinks they could get more money.  Year later and foreclosure, property is up for sale for over 6 months at a lower price than what we brought to the table and is still too high. Other listing wanted the seller to take out a personal loan for the short. 

When will the banks be motivated to listen to the market specialists..an appraisal will only use comps not what the market is bearing. 

 ANY Help out there?

Perhaps poorly constructed or incomplete/non conforming short sale proposals are only successful 20% of the time.  I've been doing them for 25 years... and have seen the majority close.  Not every upside down scenario indicates short sale.  Prequalify.  Prequalify.  Prequalify.

Thank you! Knowing that someone out there does get them to closed helps!

For those of you that would like to know how I can help you www.activerain.com/shim101

Hi my name is Simon Rosenzweig, I provide services and advice to people that are involved in real estate transactions.

I am dedicated to helping people with their title insurance and 1031 exchange needs. I provide quick and efficient service, plus you get me dedicated to helping you with your real estate needs.

You seem to know a lot about short sales.  I hope you haven't had to do too many.  Thanks for your wisdom. 

Donna you may get a call from me! I have an AR listing that didnt alert me until 30 days into the listing they are 3 months behind.Obviously there is panic as our market is sitting for months. Countrywide 1st and Citigroup 2nd . They dont want to talk until buyer arises. Seller- Upside down of course, prepayment penalties..the works. Neighborhood that is majority doublewides and this is a two story home nicely finished. I am getting no traffic due to the neighborhood.  any suggestions or creative ideas ?

Donna, hey there.  You are so sharp.  I love reading all you write and learn so much from you.  Unlike you, I am a fairly new agent, as you know.  I haven't had to do short sales yet, but am trying to learn all I can. 

BTW, I read your statements in the paper the other day.  That was cool. 

I know when I had my daughters house listed until January, the bank wouldn't work or really even talk to me.  Maybe because they owed 404 and the house was worth 450, at the time, and the first was only owed 360.  THey  kicked them out and still have the house for sale.  They didn't want to work  at all.  I am trying to find out what they are asking for it. 

I will talk to you later. Earl

Hi Earl-Bummer about your daughters house - call me or e-mail me with your daughters old address and I can see if I can look it up and see how much they are asking. You can e-mail me at: DonnasDreamHomes@earthlink.net

Michele- I would probably do a major drop on the price of the home. Maybe drop the price so tha you are at least 10% below current market value. You want to get offers ASAP- if you get enough buyers motivated you may be able to drive the price up a bit. But before you go through all that - does your client have a true "hardship" as to why they are behind?  Also - feel free to contact me direct

Has anyone read a good book on foreclosures that can help us deal with short sales?

Donna:

I am a lender, but I have been involved in many short sale deals over the years.  I usually end up leading the charge when my client is buying a home that will need a short sale.

I have found that creating a file to the lender with alot of exhibits really streamlines the process.  The last one I did stated that it would take up to 6 weeks to get an answer.  I had the approval and the property settled in 30 days.

Put as much as you can about the sellers' predicament into the file.  You have to demonstrate beyond all doubt that the sellers are in dire straights and the lender cannot hope to get anymore from them.

In California there are so many listed home in short sale status and all say w/lender approval, due to the process of having to submit an a signed purchase agreement BEFORE they will even entertain an approval.  Not sure why the lender need to wait for that to tell you if the property even qualifies for a short sale consideration --- just another way of making the process more complicated is the way I see it.

I like the comment that suggested that you get everything that you can get together prior to getting the offer so that you are ready to go when you do get that offer. 

Other tips:

1. get a signed authorization from your seller when you get the listing agreement signed.

2. investigating who is the contact in loss mitigation, numbers and all that - have it ready to go

3. Request payoff information

4. Request a fax of the process requirements of a short sell and also ask for other assitance programs this lender offer

5. make sure you cover all this with your seller - just in case they come back and say you did not let them know about other assistance the lender offers, because you wanted the sale.

6.  be upfront with other agents, potential buyers and the seller on the expectations of the lender and do not guarantee anything except that you will give this upmost attention in your effort to get it approved.

7.  I have a short sale information sheet that I got from title company that I have my sellers read and initial that they received a copy that I put in my file.

After all this, all you can do is be prepared, market the house and keep in touch will parties.  lol

www.motheranddaughterrealty.com

The banks will take time to ralize that it's not worth it for them to let homes foreclose. Also on your side you must qualify the sellers first.

I just signed contracts with the seller in a short sale. The house has been listed as a short sale. 

If the lender is indeed a "bank" who holds the mortgage... you may have a prompt decision.

More likely the "bank" is really a loan servicer who must construct the short sale application, and submit to all interested parties (actual owner of the mortgage, PMI, etc.) for approval.

Not all lenders and/or loan types are able to consider a short sale as a workout option. Hopefully, the listing agent has done his or her preliminary homework to confirm short sale as a viable option.

Short Sale Primer

Donna,

I think the difference between the servicer and the note holder causes a lot of angst and confusion with agents trying to complete short sales. There may be more than one "investor" in the note, even though all of the payments go to one servicer. The second investor may be an MI company or a subprime division of a conventional lender or even an investment bank that bought 10's of thousands of mortgages because the return was higher than the bond rate when they bought it.

The other confusion often occurs because many "banks" actually service loans for other lenders. I've handled REO properties in the past from Countrywide when the note was held by WAMU and handled properties serviced by WAMU that was only servicing for Wendover Financial. Just because the payment goes to a bank it doesn't mean that bank holds the note.

And the short sale package is just like the underwriting package that was submitted to approve the loan initially, if one document is missing or incomplete, the package goes to the bottom of the pile.

I too am hoping that soon the lenders will have to put together a standard that they follow to help resolve this bad situations that the sellers are finding themselves in.  It seem that the procedures should be the first line of buisness since we all know that short sales are here to stay for a long while due to the market up side downness.  But lenders still seem to think that they have the upper hand and is till not taking this serious enough.

If they keep turning down short sales and take the houses that are not going to sell at auctions back, and their inventory get out of hand, they will stop and take a second or third look at the "delay" process that they have going on.  Its just that so many sellers will be long gone and potential buyers will soon get even leary of the option of a short sale purchase.  It is scaring people away from the option.

Banks act like they are losing out doing a short sale but they really are not losing at all.  Its the sellers and their families that are losing out, no matter how you look at it.

Happy Monday! 

The banks are greed monsters.  If they don't wake up soon, there's going to be a lot more failing banks again.

Tim & Pam,

I do not think that the banks are greed monsters- face it - they are in the business to make money - as are most of us - but I do believe they need to have some serious restructure in the way that the short sales are being handled.

In the banks defense if they accepted EVERY short sale we would probably have even more defaults so people could just lower their payments.  I know that the seller is SUPPOSED to move out of the house if the short sale is accepted by the bank.  But I recently went to a seminar where  the "GURU" told the investors to short the house - keep the owners in  the house and have them rent it back - and then sell it back to them in a few years.  Do I agree with this Guru - HECK NO - it is not right not to mention, it is illegal - but by the same token, I am sure the banks have thought about this. 

I believe that is why the banks have such stick guidelines as to what is accepted and what is not.  My problem with the banks when you have a 100% LEGITIMATE hardship with a ton of proof and back up and then you get the run around - or worse yet - not response - and then it goes to sale.

I know there are classes out there for people in foreclosure - but most sellers do not even open the notices because they are in denial.  I wish that ALL the banks would automatically send out a letter to ever agent trying to work a short sale with exact DETAIL as to exactly what they need to have.  I know some banks have "packets" but out of the 5 short sales I have worked on in the past 2 months, I only received one "package" from a bank telling me what they would need. I do know that there are "outside" companies that will also sell this information out there to agents  - but let face it most agents are not out there looking to educate themselves in this field.

I have taken MANY classes over the years and know how to put together a good package - but there are more agents out there  trying to do this WITHOUT taking any classes on how to get short sales done- I know that the new agents are probably submitting their stuff little by little rather then all at once.  I always try to overnight my packages rather then fax so that I know EVERYTHING is in order, legible and that they get all the paperwork without pages being stuck together - and still ALMOST every time I still get duplicate requests for papers that I know I sent the bank in my  original package.

I know the agents reading these posts on activerain are here to teach and to learn.  If you are new I would LOVE to recommend a book that I recently purchased and have not had the chance to read from cover to cover - but what I have read has been excellent.  The book is also reasonably priced.  It is from our very own activerain Foreclosure Expert:    David Petrovich      I do not know Dave and other then the posts and exchanges we have had on this website I have no associations with him - but he is a wealth of knowledge and I am thankful I recently received his book.  My only wish is that I bought it when I first saw in on-line a couple of weeks ago.  (I am not sure if I am allowed to plug your book - but I just did - hope you don't mind if you read this David). 

I would say that its a little bit of a crapshoot.  Some lenders will offer more insight than others.  Some will be more accessible.  This is why, all things being equal (they rarely are), a prospective buyer (guided by a Realtor) will choose the same home NOT up for short sale...

Thanks for the plug An Ethical Approach (to preforeclosure short sales).  Proceeds from the sale of the book, or any consulting fees derived from my work as a short sale transaction coordinator are pledged to the non profit SPOCH.

This is a great blog, because short sales are up to an all time high as far as I have witnessed.  I am planning on checking out David's book but I wonder if it is the same here in California or if I need to purchase a book written by a California expert inside.

I have encountered a few banks with the process being different with each and the attitudes as well.  There should be some guidelines for these banks that they have to follow because had they not taken on these "outstretched" deals the situation would not be like it is.  At least not as bad.  Remember the banks are ones that offered these bad loans in the first place.  They had opportunity to review and review and deny buyers if it is didn't look like they would be able to handle the payments.

Thanks for all the education on short sales.  I am also going to check out the group - FORECLOSURE FOCUS, I am sure there is more great information there.

"I wonder if it is the same here in California" 

Although each state may have its own foreclosure procedures, the essentials of preforeclosure short sale construct are ubiquitous.  Each lender, and loan type may impose its own criteria for short sale, and the process cannot be approached in a cookie-cutter fashion....each case is unique and must be proposed on a case by case basis.

From my experience, the requirements (paperwork wise) is pretty much the same, some want more, some want less. (usually, its hardship request letter and proof), check stubs, bank statements, w2 or tax returns, some have a form of information to be filled out, the rest they have which is the mortgage history.

Once you turn in the paperwork, then the changes start to be very (annoying), some will get back to you, let you know if its a go or not, then the others will play with you saying they didn't get all the paperwork (no matter how you send it to them), then others won't answer the phone calls, then other will just hold on to the request until it is too late for the seller to have any other options (and that is totally wrong), and this is where I have my problems -- they don't play fair.

It look to me like banks do like inventory after all.  Because the odds of properties being sold on the court house steps is taking a chance of having that property on the block for a long time.  REOs are usually priced too high.

We all should know that not every short sale request is going to be granted, but we should be able to know that in plenty of time to give our sellers the news and let them search out other options.

You used to do them years ago.  You stopped.  You are back and wondering why.  Stop doing them if it is a time consumer and causes you to fume! There are tons of ways to make money in real estate...pick the ones that are fun, you are designed to do and consider it all joy!

Hi Andrew - I am not sure exactly who your comment was directed to, but I will answer it. The reason I stopped doing short sales is that for the past few years my market had huge appreciation and you could purchase a house and flip it in a matter of months and still make money.

As for short sales being time consuming - every deal I work is time consuming. I am a hands on agent who puts all of my energy into making sure my clients get a great deal and that all the paperwork is complete and accurate.

As to deals causing me to fume - I think in almost every deal I get a little fumed about one thing or another - especially when things are out of my control.  I am not a control freak - but I like people to do what they say they are going to do, and to put the time, energy and dedication into their job that I do. Not some half A** job that my 3 year old could do.   I am paid well for the work that I do - and I like my clients to get their moneys worth.

I only work foreclosures that I believe are true hardships - I will not take the deal where a client has money in the bank and just decided after pulling $150,000 out of the home that since the market has declined wants to walk away.

I wish that I could say that every single day of my life had nothing but joy when it comes to real estate - but if I said that it would make me a big fat liar.  I have no joy telling a client that another person dropped the ball and did not do the job they were supposed to do - or when the lending industry has huge changes - again out of my control shutting down many of the buyers in my market place.

I may be a bit more sensitive about putting extra time, energy  and compassion into my clients because my husband is a deputy sheriff.  I know what he and many other civil servants do every day on the street and the risks that they take to help people that they do not even know. I also know very well what they are paid - and to be honest - I can easily make double or triple his salary with far less time and risk.  Maybe this is what makes me take the extra time and effort for my clients.

You are right - there are  a ton of ways to make money in real estate - and I work more then one avenue of the business.  I could choose to walk away from every short sale and foreclosure deal that I currently have and not put the extra time and energy into a deal and financially it would not kill my business- but I got into this business for two reasons.  1) to provide a financial income that allows me to spend as much time as I want to with my family and  2) And this one is ALMOST as important to #1 for me- to help people improve and sometimes get a new start in life. 

A new start means many things to many people.  It may be a seller with a true hardship just wanting to be relieved from the burdens or stress of his home facing foreclosure, or it could be a first time buyer or new investor buying a property in hopes to one day be financially free.

Being an agent representing foreclosures in NOT necessaily the fastest way to make money in this business - nor is it the most profitable as most banks will not pay the full 6% commission.  But it is one of the ways that I choose to make a living - and although there are times during the day that I may question my choice to work with clients in destress - it is all worth it when a seller THANKS YOU for relieving them of a financial and emotional burden. 

I know that Short Sales will not be the biggest commission check that I receive in my career. When my husband graduated from the Sheriffs academy, he took an oath to Protect and Serve the Community- and when I married him I guess I must have done the same thing.

My hope is that when the day comes for me to leave this planet - the big guy up stairs will remember my work and the rest of my rewards will be received then. 

Its about relationships with anyone involved in the transaction and the quality of your short sale package.

1)make sure you send everything at once. A few posts prior Rosemary Brooks spoke about the required elements to be included.

2)dramatize all the negatives in your letter. emphasize illness (document serious illness), emphasize unemployment (document reasons for unemployment), if someone past away document this and explain who this person was and what impact this person had on paying the mortgage in the past.

3)document why the home is NOT worth what it the appraisal stated when it was purchased. Dont just use standard comps from the mls. Use tax sales from all types of transactions. Act as an appraiser and make adjustments for differencese between comps. If the property your short selling does not have a kitchen and/or bathrooms and comps A & B do then you must make huge adjustments.

4)persistance! call every the mitigator every day to make sure he/she has received your complete package and do find out if they are going to play ball. When you get the mitigator on the phone realize that this person is a 9-5 hourly/salary person who has hundreds of files like yours to sort through...and remember the mitigator DOES NOT make the decisions...he/she only gathers the paperwork, checks for red flags and passes it on to the higher up. Maybe a VP or upper level exec. 

Donna:
Wow, I don't know about you... .but I feel better after reading that.....(lol).  I agree completely.  It is the same everywhere.  I am closing next week with a buyer who waited over 6 weeks to get a response from the bank after they initially verbally accepted, the seller was happy but the bank never executed the contract, so the buyer bought elsewhere.  6 weeks to go nowhere!  I haven't figure out how they expect to get more $$ by waiting either.  Great post.

Fort Lauderdale Realtor

Hey this is some good reading, I am going to bookmark and read later.  Short sales can make you pull your hair out.  The clock ticks so loud and time flyes with short sales and if you do not hurry and sell you will and seller will lose out.

Hi Donna,

Great post and many comments...I think I read most of them, I know I skipped a few.

I feel your pain and frustration on short sales. years ago I worked for a 3rd party foreclosure company. Loss mitigation departments are very frustrating! 

Didn't read throught the comments, but I just took a class on this through my title company.
Does anybody really have a good system for short-sales.  It just seemed like way to much work for the risk and money.
Am I not seeing something?

My take: Short sales are here to stay for a while until we get out of the situation we are in.  I can either look over any listings that might be or become a short sale and just try for the regular listings -- or I can join in.

There is a little bit more work but once you get a system going, its not that much.  The risk is not too much more than someone making an offer and not following through with the sale.  But to be honest it makes you frustrated when the lender won't get back to you, won't answer your calls or just plain refuse to deal.  When they know they don't want to add to their inventory.

If we as agents get our process together, with a clear understanding that short sales are here for a while and we stick together on hopefully working with the banks to get their stuff together, come up with a process that will work for all and stop trying to act like they got it like that=== because we all know having all that inventory is not good for business.

Don't give up.

Every lender, servicer or mortgage insurance company has it's own criteria and procedure for short sales.  They are trying to minimize losses and often not near enough the property to inspect it.  It is a difficult situation for everyone concerned.  In these situations someone is going to lose money and everyone involved wants it to be the other party. 

Laura you are right, all different in some way.  But there should be a way for them to be accountible for either a speedy decision or something to help the seller not be stuck in limbo and run the chance of the house being sold at a trustee sale if they have someone that wants to purchase it, but the lender is delaying by not responding.

Oh speaking of procedures:

If you have a short sale listing or one that could turn into short sale, make sure ou fill out the following:

Purchase Agreement Addendum (PAA) that address short sale.  Its an addendum to the purchase agreement. 

Authorization to receive and convey information: this gives you right to print your seller's property is short sale and other information.

see my posts:Short Sale - Important Information for a successful sale and my post: Short Sale - Sample hardship letter

Not a plug for me, but this is some valuable information.

Rosemary, great point

Nice post. 

I hear that in the near future, there will be a change in the way banks handle foreclosures. I am not sure what the proposed plans are but I am keeping a ear to the ground for I am about to handle short sales as well.

Had to come back to this post.  Please forgive me for plugging my posts but I want to share any Short Sale information that I find and this is a good way to do it.  You can do the same on my posts, but please go check them out:

Tax Relief from Short Sale - Will it pass? HR 1876

Invest without agent - its the California Law

Also, I wanted to share. One of my submits to the lender for SS approval, just finally got back to me and ask that I get my seller to fill out a 2 sheet financial report!  Claimed they did not get 1/2 the papers I sent to the them.  Next time I fax it to them I will fax it twice, so this will not happen again.  They did get "some" of the paper but not all of it. 

So this may be a part of the new process, get a financial report in details instead of just the copies of the bank statements and pay stubs with the hardship letter.

I do not fax my paperwork to the lenders.  I get my package ready and put it in a nice binded folder, organized with tabs and overnight it to them.  This way they can not claim they did not get everything.  It is all in one spot and organized.  It costs a little more but saves you time.  Oh - dont forget to keep an extra copy of two in case they loose the folder!  :-)

Awesome post Donna.  I've been looking into short sales lately and this is definitely something I'll keep in mind.  Looks like you're a pro and did your part.  Something needs to change for this to be less of an inconvenience for us investors that are trying to help.

Donna, thanks for that suggestion.

What tabs do you use?

I will do that with this one I have here to send out.  When I called them and asked what to do they sent me a package (via fax) and the instructions were to fax it to them.  They did not provide an address to send short sale request, you know sometimes they are not in the same place as the addresses they provide and they have a po box.  How do you get around all those obstacles?

I usually use what ever tabs I can find on sale or already have.  Usually they are the Index Tabs with printable inserts or the ones that you can write on.  Once I used the ones that were numbered because that was all I had and did not feel like running to Staples before getting it in the mail and I just made and index for the front.  I did not like that as well because I want to make everything as easy as possible so they do not have to flip to figure out what is in each section.

I usually have a separate tabs for: Offer, Listing Agreements,Comps, Hardship Letter etc.

I try to get the physical address at the same time as I get the name of the person in charge.  If they will not give it to me, I will usually call back and try to talk to someone else. I have used several methods - Once I pushed extensions until I got a live person and asked them  if they would give me the physical address of "Jane Doe" because she had done a great job and I wanted to send her some flowers. Another time I said that "Jane Doe" gave me the address and I lost it and they asked me to overnight a package. Usually if you press "0" you can get a live person (although not always - I think I get India when I call Option One).

I have also used the press "O" method to get the name and address & phone number of the manager of loss mitigation.Most of the time they are reluctant to give you to the  information. I will usually give some BS Story like "Jane Doe" did a great job and I wanted to send a letter of appreciation.  Usually if you are nice and sometimes act a little stupid you can BS way into the information. 

There have been a couple of times that I have called and hung up 4 o5 times until I got a different person on the phone who would give me the information.  You may even have to try the next day.

Donna, I probably don't know any more than you do on the topic.  However I have been writing a series of educational how to articles on short sales that are all published here for free on active rain.  The series is not complete, so if you like what you see, then please bookmark it and come back for more.

John Occhi, Hemet CA REALTOR
Mission Grove Realty

http://activerain.com/blogs/mrhemet/tags/short%20sale